Under the alternative method for recording prepaid expenses, which is the correct set of journal entries?
A.
| Initial Entry | Adjusting Entry |
| Insurance Expense | Prepaid Insurance |
| Cash | Insurance Expense |
B.
| Initial Entry | Adjusting Entry |
| Prepaid Insurance | Cash |
| Insurance Expense | Prepaid Insurance |
C.
| Initial Entry | Adjusting Entry |
| Cash | Prepaid Insurance |
| Insurance Expense | Insurance Expense |
D.
| Initial Entry | Adjusting Entry |
| Prepaid Insurance | Prepaid Insurance |
| Cash | Insurance Expense |
E.
| Initial Entry | Adjusting Entry |
| Prepaid Insurance | Insurance Expense |
| Cash | Prepaid Insurance |
Answer: A
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